Okay, here goes:
I like this one. I really do. It is a cool idea and you write well. However, I had to downvote for a few reasons.
First off, your tone is a bit off. Try making it more clinical.
"Civilians are aware of Foundation presence as well as our moderation of their activities, and have proven to be surprisingly compliant." I think you mean "monitoring." That's not a huge deal though.
In my opinion, if Area I-4 = SCP-277 then you don't really need to specify Area I-4. You can just call it SCP-277, since they are one and the same. It would be like saying "This is John Smith. Call him Bob Millers." Just an unnecessary level of complication.
Your use of [DATA EXPUNGED] and [REDACTED] is very sloppy, and makes this hard to read. A few times it is okay, but I feel as though you overuse them, and make sentences very very choppy. You really should only use them if either A) it is something the Foundation would actually block out or B) our imaginations will create a wonderful horror for us, far surpassing anything an author would write.
I really liked the interview log, but I don't like that it turns out to be one boy who is possessed or something. That was kind of a bummer for me, and made it too easy to explain; I liked it better when there were just random rabbits who ate kid's imaginations.
Overall, I feel like you just have too much going on here (part of the reason it is so damn long). I can really see this one working if you condense it a bit, maybe cut out the part about all the residents being missing persons (it just seemed a little random and unnecessary, but that's just me).
All that said, I am still relatively new to the site, so take all my advice with a grain of salt. Good luck!